How Angry Birds is Boosting a Finnish Brewery

If beer sales slump, Angry Birds will give you a lift. That’s the outlook going into 2013 for a small Finnish brewery and beverage company Olvi Oyj.

Angry Birds, the wildly-popular mobile game franchise, is owned by the Finnish game developer Rovio Entertainment. Olvi struck a licensing deal with Rovio about a year ago and launched its Angry Birds-branded line of soft drinks last spring, Olvi chief executive Lasse Aho says.

Now orders are pouring in both from Finland and especially abroad. According to Mr. Aho, Europe, Russia and CIS countries are the main export markets, but orders have come from as far away as Australia, Mexico and Saudi-Arabia. “This is a big deal for us,” he says.

Olvi’s brewery, situated in the town of Iisalmi on a shore of a now-frozen lake 400 kilometers north-east of Helsinki, recently hired twenty new employees and switched to a seven-day production week — a move previously unheard of in January in Finland, where breweries and beverage makers have traditionally made their annual profits during the brief summer peak season.

So far, Angry Birds have had little impact on Olvi’s financials. Last year Olvi’s total sales volume in Finland was 148.8 million liters, and soft drinks, including Angry Birds-branded products, which accounted only for some 15 million liters.

But growth rates for beverages were impressive. Olvi’s overall soft drink sales volume grew by 85% and export and tax-free sales by 51% in 2012 largely on the back of growing demand for Angry Birds products. The group’s annual net sales were €312.2 million euros, and it made a net profit of €25.7 million.

Mr. Aho’s excitement is both palpable and understandable. Angry Birds offer a new opportunity to create shareholder value for Olvi as beer and beverage sales have stagnated in its home markets in Finland and Estonia.

According to Mr. Aho, Angry Birds soft drinks sell at 20-30% higher retail prices than Coca-Cola. “For retailers this is a very profitable product compared to big global brands which are sold at very low margins,” he says.

Building new revenue streams through licensing deals and product tie-ins is part of Rovio’s strategy for Angry Birds. In Finland, you can buy Angry Birds-branded coffee and confectionery along with the more traditional tie-ins of toys, apparel and other accessories.

The game’s economic impact is widely felt: Angry Birds confectionery is made by privately-owned Fazer Group, and Fazer’s main production site for Angry Birds-branded products reached its all-time production record its in 2012, due in large part to the rapidly growing demand for Angry Birds products.

Olvi has much riding on success of Angry Birds. “We of course hope that the franchise keeps renewing itself and remains vital,” Mr. Aho says. The company works in close co-operation with Rovio, and new product launches are slated for spring.

Should Olvi’s sales and profit growth move into a greater order of magnitude, an intriguing shareholder would be among the beneficiaries. A foundation connected to Ingvar Kamprad, the founder of IKEA, owns 5.3% of Olvi’s shares, and Mr. Aho has met Mr. Kamprad twice on visits to Olvi in Iisalmi.

“I think he became interested in Olvi some seven or eight years ago after his close associate recommended Olvi as a company with future growth potential,” Mr. Aho says.